BTC Onchain Demand Indicator Flips Negative While Price Battles $77K Level
Bitcoin's onchain demand metric has shifted back into negative territory following a short-lived recovery in August, while BTC prices fell beneath $77,000 during a widespread selloff across bond and equity markets.
During the early hours of Wednesday's European trading session, Bitcoin (BTC) experienced a selloff that pushed prices down to local lows of $76,400, according to data provided by CoinGecko.
Key points:
- A key Bitcoin apparent demand metric has returned to negative readings, while BTC price touched a local bottom at $76,400 before climbing back above $77,000.
- The USD/JPY currency pair experienced a sharp decline to 158.5, fueling market speculation about potential yen intervention by Japanese authorities.
- Major Asian stock indices experienced significant losses with South Korea's KOSPI declining 4.0% to 6,562.72 and Japan's Nikkei 225 sliding 2.9% to 64,325.64.
Bitcoin's apparent demand flips negative again
The downward movement in BTC price occurred following a $236 million outflow from US spot Bitcoin exchange-traded funds (ETFs) on the previous trading day. According to data sourced from CryptoQuant, Bitcoin's apparent demand metric has once again shifted into negative territory following a temporary recovery that occurred during the rally in August.
This particular indicator takes inspiration from comparable metrics utilized in commodity market analysis and calculates the differential between freshly mined coin issuance and fluctuations in inactive supply holdings. When demand readings are positive, it suggests that previously dormant coins are becoming active again and that the market is successfully absorbing both these old coins and newly issued supply. Such positive readings are interpreted as evidence of genuine spot market demand. Conversely, negative readings indicate that coins are moving into dormant status at a faster rate than miners are producing new supply.
As of the current time of writing, BTC has successfully recovered above the $77,000 threshold, though it continues to face downward pressure from a concentration of resistance levels that have been documented in previous reporting.
Bonds and Asian equities sell off
The widespread bond market selloff that was covered by Cointelegraph on Monday showed signs of modest relief as the US 10-year Treasury yield temporarily fell below the 4.8% mark. Unusual and inorganic price movement was observed in the USD/JPY currency pair at 13:00 UTC, which market commentators broadly interpreted as evidence of another intervention by the central bank. The USD/JPY pair dropped to 158.5, pulling back from the psychologically significant 160 level that is widely regarded as a threshold the Bank of Japan (BOJ) is committed to protecting. As of this writing, no official statement regarding the matter has been released by authorities.
In the meantime, Asian stock markets experienced significant downward pressure, presumably influenced by surging oil prices and additional profit-taking activity within the artificial intelligence sector. The South Korean KOSPI index spearheaded the downturn, declining 4.0% to settle at 6,562.72 as major chipmakers SK Hynix and Samsung Electronics posted losses of 4% and 4.7%, respectively.
The Japanese Nikkei 225 index declined 2.9% to finish at 64,325.64, pulled lower by major technology stocks such as SoftBank Group, which has invested in OpenAI. Taiwan's TAIEX index concluded the regional losses with a 1.7% decrease. Previously in July, Cointelegraph published reporting on the initial signs of weakness emerging on the US side of the AI trading sector, as credit spreads on hyperscaler companies widened substantially.